Administration Announces Intent to Negotiate TPP

In a December 14 letter, U.S. Trade Representative Ron Kirk notified members of Congress that the administration intends to enter into negotiations for a Trans-Pacific Partnership (TPP). This agreement has the potential to provide a framework for greater trade liberalization across Asia, an increasingly important export market for the United States and IDFA members.

"The huge markets of the Asia-Pacific region are already key destinations for U.S. manufactured goods, agricultural products and service suppliers," Kirk said. "U.S. goods exported to the Asia-Pacific region totaled $747 billion in 2008, up 8.3 percent over the previous year, with agricultural products comprising $76 billion of the 2008 total, a 30 percent increase over 2007."

The current TPP agreement includes Brunei, Chile, New Zealand and Singapore, with Peru, Australia and Vietnam as potential participants. Before last year's economic downturn, U.S. dairy exports to these countries had increased over 60 percent each year since 2006. In the first nine months of 2009, dairy exports to these seven nations totaled $88.9 million.

The Obama administration's first free trade agreement will encounter different obstacles from those initiated by the Bush administration, however. Previous agreements fell under fast-track authority, which allowed the president to send agreements to Congress for an up or down vote without opportunity for amendments or filibusters. This authority has since expired.

Even though the proposed TPP agreement has elicited marked opinions on either side, Kirk said he is confident that Congress will support it and restore fast-track authority.

The negotiations are slated to begin in March in Australia.

Congress Paves Way for Agricultural Trade with Cuba

The U.S. Senate recently approved a provision that would enable cash sales of U.S. farm goods to Cuba, loosening trade restrictions that were carried over from the previous administration. This bill and its U.S. House counterpart are expected to be signed into law today by President Obama.

"The approval of S. 1089, 'The Promoting American Agriculture and Medical Exports to Cuba Act of 2009,' is a tremendous opportunity for U.S. dairy exporters," said Clay Hough, IDFA senior group vice president and general counsel. "Previous trade embargoes were inadvertently hindering American business and having a negative impact on export growth."

Cuba has long held great potential as an export market for U.S. agricultural goods. The U.S. International Trade Commission estimates that current U.S. agricultural exports could increase by hundreds of millions of dollars once farm trade restrictions with Cuba are lifted.